Boom boosts Bank of Ireland

Profits before tax and exceptionals jumped 12pc to Eu567m (£341m), at the top end of analysts' forecasts. In an upbeat trading statement, Bank of Ireland described its ongoing performance this year as "very encouraging" - a contrast to last year's disappointing final results.

The company said it has beaten market growth in "key areas" of its domestic market "despite intensifying competition". The company's retail and corporate banking divisions recorded "excellent" interim profit jumps of 28pc and 33pc respectively.

Lending and deposits grew on the back of the continued boom in the Irish economy, the bank said. However, Maurice Keane, Bank of Ireland chief executive, admitted that his country's economic success could not continue indefinitely.

Mr Keane said: "The Irish economy cannot continue to grow at 8pc to 10pc a year without something bursting." He added that he expected growth to slow down to around 5pc, a rate which did "not unduly worry" him.

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Bank of Ireland has so far spent Eu22m on preparing for the introduction of euro notes and coins in 2002 and expects to spend a further Eu58m before then.

Pre-tax profits at the bank's British subsidiary, Bristol & West, slipped 3pc to Eu116m. Bank of Ireland hopes this situation will improve as Bristol & West diversifies its portfolio away from traditional mortgages and savings accounts to higher-margin products.

One analyst described Bank of Ireland's interim figures as "better than expected", with "a positive message going forward". The company is forecast to make full-year profits of about Eu£1 billion. The bank's shares rose 2.6pc to Eu9.2.